ACC422C-001 d) Prepare a direct labour budget. (3 marks) e Prepare a factory overhead budget. (5 marks) f Prepare a schedule detailing out the unit cost. (4 marks) 9) Prepare a budgeted Income Statement. (6 marks) Assignment #2 Fall 2020 Part 2 Part 1 The company is considering the following 2 investments in manufacturing equipment. Assuming an interest rate of 12%. Proposal Great Biking Company manufactures a unique model of bicycle helmet. The company began operations January 1, 2020. Its accountant quit one week ago and they are asking for your advice. It is now November 1, 2020 and they are planning for the December 2020 production month. They are anticipating sales of 25,000 bicycle helmets in December 2020 at a selling price of $325 each. They have 7,500 units in inventory and at the end of December 2020 thay only want to have 2,500 bicycle helmets on hand. Each bicycle helmet uses 6 units of direct materials in production at a cost of $15 per unit. Currently there are 15.000 units of direct materials on hand and at the end of December 2020 the company would like to have 25.000 units of direct materials on hand Proposal B Investment 350,000 250,000 Year 1 It takes 3 direct labour hours to produce one helmet at a cost of $25.00 per hour. Factory overhead is applied at the rate of 80% of the direct labour cost. 2 3 Cash Flows 100,000 100,000 100,000 100,000 100,000 500.000 The following manufacturing expenses are expected to be incurred during December 2020. 65,000 65,000 65,000 65,000 65.000 325,000 4 5 35,500,00 Property Taxes - Manufacturing Building Insurance - Manufacturing 25,600.00 85,000.00 Utilities Machinery Repairs and Maintenance a) What is the cash payback period of each investment? (2 marks) b) What is the average income of each investment? (2 marks) 35,800.00 Manufacturing Building Repairs and Maintenance 25,700.00 Indirect Materials 25,600,00 Depreciation on Manufacturing Building 34,800.00 c) What is the average rate of return of each investment? (2 marks) d) What is the Average Rate of Return of each investment? (4 marks) Depreciation on Manufacturing Equipment Supervisor Salaries 75,000.00 57,000.00 e) What is the Net Present Value of each investment? (14 marks) 1) What is the Internal Rate of Retum of each investment (2 marks) Part 1 Required a) Based on the internal rate of return, which investment would you choose and why? (2 marks) a) Prepare a sales budget. (3 marks) 25,000-15,000=10,000 b) Prepared a production budget. (4 marks.CS c) Prepare a direct materials budget